Lenders pursuing “fire sale” of China Fishery’s assets, but Ng family resists

Published on
August 11, 2016

A group of lenders including several large international banks have appealed to the judge presiding over the China Fishery Group’s bankruptcy proceedings to appoint an independent trustee to oversee liquidation of the company’s assets, according to an article in the Wall Street Journal.

In court papers filed with the U.S. Bankruptcy Court in New York on 8 August, lawyers for the lenders, who are collectively owed more than USD 700 million (EUR 627 million), warned of the “grave risk” of allowing the Ng family, which founded China Fishery Group, to remain in charge of the company.

China Fishery, part of Hong Kong’s Pacific Andes International Holdings, filed for Chapter 11 bankruptcy protection in June 2016, while four affiliates, including Pacific Andes Resources Development, filed for Chapter 15, which covers international insolvencies.

According to the WSJ article, the Ng family would rather pursue a reorganization of the company rather than a “fire sale,” which China Fishery’s CEO Ng Puay Yee said in court documents is the preference of the lending group. Ng called the recent legal actions of the lenders “aggressive and improper.”

However, the lenders, which according to court documents include Rabobank, Standard Chartered Bank, China Citic Bank and DBS Bank, said the Ng family is delaying any company reforms because if the company is liquidated, the family’s equity stakes would be the last to be repaid.

“The need for transparency and independent oversight has been a substantial concern of the [lenders] for some time,” the banks said in court documents. “The stakeholders have lost all faith in the Ng family properly using Chapter 11 to best serve creditors’ interests.”

The banks are especially interested in seeing the sale of China Fishery’s Peruvian assets, which include a fleet of 76 vessels and 10 processing plants, according to the article. Those assets are believed to provide the bulk of China Fishery’s annual revenue, which adds up to an estimated USD 585 million (EUR 524 million) annually, making it one of the largest seafood companies in the world.

The judge in the case, James Garrity, may rule on whether to appoint a trustee as early as a scheduled hearing on 29 August.

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